News and events

July 29, 2016 1:00 PM (UTC +7:00)—Kuzbasskaya Toplivnaya Company PJSC (KTK, MICEX: KBTK), one of the largest producers and exporters of thermal coal in Russia, today announced operating results for the second quarter and six months ended June 30, 2016.

 

Second Quarter 2016 Key Production Results

	Q2 2016	% of tota	Q1 2016	Chg.	Q2 2015	Chg.
Coal production1, in millions of tonnes, incl.:	2,73		2,79	-2%	2,49	10%
Karakansky South open-pit mine	0,84	31%	1,07	-21%	0,68	23%
Vinogradovsky open-pit mine	1,13	41%	1,20	-6%	1,18	-4%
Cheremshansky open-pit mine	0,56	20%	0,53	-6%	0,63	-11%
Bryansky open-pit mine	0,2	8%	-	-	-	-
Commercial products2, in millions of tonnes	2,35		2,41	-2%	2,11	11%
Coal processing3, in millions of tonnes, incl.:	2,12		2,19	-3%	2,01	5%
Sorted coal	1,05	50%	1,19	-12%	1,05	-
Washed coal	1,07	50%	1,00	7%	0,96	12%
Kaskad 1 washing plant	0,27	25%	0,25	8%	0,27	-
Kaskad 2 washing plant	0,80	75%	0,75	7%	0,69	16%
Stripping, in millions of cbm, incl.:	14,10		15,29	-8%	15,20	-7%
Blasted rock mass4, in millions of cbm	7,46		8,39	-11%	8,91	-16%
Average stripping ratio5	5,20		5,50	-5%	6,10	-15%
Average stripping transportation distance, km	2,60		2,40	8%	2,50	4%

• In the second quarter of 2016 the Company produced 2.73 million tonnes of coal, which is 8% more than what was forecast in the previously published production plan. Coal production fell by 2% quarter-over-quarter and rose by 10% over the year-ago quarter.
• Since the beginning of the year, coal production increased by 23% at Karakansky South, this is due to ongoing measures to optimize costs, the cost of production at this mine is the lowest.
• In this quarter production began at Bryansky open-pit mine, 0.2 million tonnes were produced.
• The volume of commercial products, as well as coal processing, went down insignificantly compared to the first-quarter level and grew by 11% compared to the year-ago quarter.
• In the second quarter the Company processed about 90% of commercial products, washing 50% of the raw material, the remaining volume of coal was sorted.
• The volume of stripping and that of blasted rock mass in the second quarter of 2016 fell both quarter-over-quarter and over the year-ago quarter. This, too, is one of the components of cost-cutting measures.
• The average stripping ratio in the second quarter also saw a 5.5% and a 14.8% fall, respectively, while average transportation went up both compared to the first quarter of 2016 and to the year-ago quarter.

 

Second Quarter 2016 Key Commercial Results

	Q2 2016	% of total	Q1 2016	Chg.	Q2 2015	Chg.6
Sales volume7,  in millions of tonnes, incl.:	2,33		2,56	-9%	2,40	-3%
Export sales volume	1,75	75%	1,84	-5%	1,82	-4%
Domestic sales volume	0,58	25%	0,72	-19%	0,59	-1%
Own coal	2,27	97%	2,45	-7%	2,30	-1%
Coal resale	0,06	3%	0,11	-45%	0,10	.-40%
Average selling price, RUB/tonne8	912		1 408	-35%	1 138	-20%

• In the second quarter sales fell by 9% versus the volume of the previous quarter, standing at 2.33 million tonnes of coal. The seasonal factor played a role here, sales traditionally fall during this period, last-year second-quarter figure was only slightly above the one this year. The decrease was primarily due to the reduced level of sales in the domestic market.
• Coal resale decreased both over the first quarter and the year-ago corresponding period.
• Second-quarter average coal selling price fell by 35% compared to the first-quarter figure, amounting to RUB 912 per tonne. Compared to the second quarter of 2015, the average price went down by 20%. This is due to the high USD exchange rate in the beginning of the year and a general price decline during this period. Moreover, in the first quarter last year's contracts for the supply of coal were expiring, they had been signed at more favorable prices.

 

Key production results for the six months to June 30, 2016

	6M 2016	% of total	6M 2015	Chg.
Coal production9, in millions of tonnes, incl.:	5,52		5,37	3%
Karakansky South open-pit mine»	1,74	31%	1,86	-6%
Vinogradovsky open-pit mine	2,33	42%	2,37	-2%
Cheremshansky open-pit mine	1,09	20%	1,14	-4%
Bryansky open-pit mine	0,37	7%	-	-
Commercial products10, in millions of tonnes	4,77		4,65	3%
Coal processing11, in millions of tonnes, incl.:	4,31		4,10	5%
Sorted coal	2,24	52%	2,27	-1%
Washed coal	2,07	48%	1,83	13%
Kaskad 1 washing plant	0,51	25%	0,52	-2%
Kaskad 2 washing plant	1,55	75%	1,32	17%
Stripping, in millions of cbm, incl.:	29,39		30,16	-3%
Blasted rock mass12, in millions of cbm	15,85		17,82	-11%
Average stripping ratio13	5,3		5,6	-5%
Average stripping transportation distance, km.	2,5		2,5	-

• For the six months of 2016 the Company produced 5.52 million tonnes of coal. Bryansky open-pit mine was the main contributor to this growth and produced 0.37 million tonnes of coal, 7% of all production.
• Commercial product volume for the six months stood at 4.77 million tonnes.
• Coal processing amounted to 4.31 million tonnes.
• All the indicators slightly rose over the year-ago levels.
• The share of processed coal in the commercial products is gradually going up and was 90% in the six months.
• Total coal washing for the six months grew by 13% to 2.07 million tonnes.
• Coal sorting volume fell slightly and stood at 2.24 million tonnes.
• During the six months of 2016 stripping volume went down by 3%. The volume of blasted rock mass was 15.8 million cbm, a decrease of 11%. The average stripping ratio in the period dropped by 5% year-over-year and stood at 5.30. Average stripping transportation distance didn’t change.

 

Key commercial results for the six months to June 30, 2016

	6M 2016	% of total	6M 2015	Chg.
Sales volume14, in millions of tonnes, incl.:	4,89		4,96	-1%
Export sales volume	3,59	74%	3,42	5%
Domestic sales volume	1,30	26%	1,54	-15%
Own coal	4,72	96%	4,66	1%
Coal resale	0,17	4%	0,30	-43%
Average selling price, RUB/tonne15	1 223		1 247	-2%

In the six months of 2016 sales largely remained at the level of the previous corresponding period. Domestic market coal sales fell by 15%. Export sales stood at 3.6 million tonnes, an increase of 5% in yearly terms, representing 74% of total sales.

At the end of the first half of the year we can also see a second-quarter tendency of coal resale decline, its share fell by 43% during this period.

For the six months of 2016 the average selling price was RUB 1,223 per tonne, a decrease of 2% over the year-ago period.

On August 24, 2016 the Company is planning to release its consolidated unaudited IFRS financial statements for the six months ended June 30, 2015.

 

Contacts for analysts, investors, and press:

Elena Sarycheva, head of public affairs department

+7 (3842) 36-47-62

es@oaoktk.ru

 

KTK at a glance:

Kuzbasskaya Toplivnaya Company PJSC (KTK, MICEX: KBTK) is one of the largest manufacturers and exporters of thermal coal in Russia. Production assets of the Company include three current plots and one projected plot at the Vinogradovsky mine in Kemerovo region, as well as two washing plants and own railroad infrastructure located in the same industrial cluster with the production assets. The Company operates retail networks in four regions of Western Siberia and a wholesale network in Poland. The company employs over 4,400 people. KTK’s shares are traded on MICEX, the free float is 33.15%.

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Financial highlights under IFRS: 

in millions of RUB	2015	2014	2013
Revenue	24 994	22 250	22 490
Cost of sales	20 932	18 925	19 523
Production cash costs per tonne, RUB		577	611
EBITDA	2 697	2 518	2 422
EBITDA margin	10,8%	11%	11%
EBITDA per tonne, RUB	245	237	239
Net profit	37	7	640
Net profit margin	-	-	3%
Net debt?	5 642	6 101	3 917
Net debt / EBITDA	2,09	2,42	1,62

Additional information about the Company and investor calendar:  www.oaoktk.ru/en/investors

 

Rounding and errors:

Certain numerical figures included in this press release have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that preceded them. Calculations of change in % are made after rounding of figures.

We make every effort to check and verify the materials, but if you find any errors or inaccuracies please report it to pr@oaoktk.ru.

 

¹Including Kaskad 1 washing plant

²Volume of salable output after sorting and washing of produced coal

³Coal washing and sorting

⁴Included in stripping

⁵Share of coal produced in stripping

⁶Change Q2 2016/Q2 2015

⁷Sales for the group of companies, including third parties coal resale

⁸ Excluding rail tariffs and VAT

⁹Including Kaskad 1 washing plant

¹⁰Volume of salable output after sorting and washing of produced coal

¹¹Coal washing and sorting

¹²Included in stripping

¹³Share of coal produced in stripping

¹⁴Sales for the group of companies, including third parties coal resale

¹⁵Excluding rail tariffs and VAT